* Chapter 3 Organizing the Workplace [These slides are intended to be used in conjunction with Health Care Management by Donald J. Lombardi and John R. Schermerhorn, Jr. with Brian Kramer (the Text).    Please refer  to the Text for a more complete explanation of the materials covered herein and for all source material references.] Copyright by John Wiley and Sons, 2006 *Organizing is the process of arranging people and other resources to work together to accomplish a goal.Organization structure refers to the system of tasks, workflow, reporting relationships, and communication channels that link the diverse parts of an organization. Restructuring is the process of changing an organization’s structure in an attempt to improve performance. Common Organizational Structures * Organizing and Management Functions * Formal and Informal Structures The formal structure is the intended or official structure of an organization. An organization chart is a diagram that identifies key positions, job titles, lines of authority, and communication within an organization. An organizational chart may reveal the following about an organization:the division of worksupervisory relationshipscommunication channelsmajor subunitslevels of managementThe informal structure is the unofficial but often critical working relationships among organizational members, regardless of formal titles and relationships. *Functional structure refers to an organizational strategy in which people with similar skills and performing similar tasks are grouped together. The major advantages of a functional structure include:efficient use of resources within and between functional areasconsistent and appropriate task assignments based on expertise and training within each functional areahigh-quality technical problem-solving;in-depth training and skill development within functionsclear career paths within functions.Some disadvantages include:creation of functional chimneysreliance on upper managementconfusion and responsibility-shifting Functional Structures * Divisional StructureDivisional structures group together people who provide the same services, work within the same processes, serve similar audiences, or are located in the same area or geographical region.Potential advantages include:More flexibility in responding to environmental changesImproved coordination across functional departmentsClearer points of responsibility for delivery of services or productsExpertise focused on specific patients or customers, products, and regionsGreater ease in changing size by adding or deleting divisions.Potential disadvantages include:RedundancyInternal competitionTunnel vision *Matrix structure combines elements of both the functional and divisional structures, using permanent cross-functional teams to integrate functional expertise with divisional focus. Potential advantages include:more interfunctional cooperation in operationsincreased flexibility in meeting chan.

1. *
Chapter 3
Organizing the Workplace
[These slides are intended to be used in conjunction with Health
Care Management by Donald J. Lombardi and John R.
Schermerhorn, Jr. with Brian Kramer (the Text). Please refer
to the Text for a more complete explanation of the materials
covered herein and for all source material references.]
Copyright by John Wiley and Sons, 2006
*Organizing is the process of arranging people and other
resources to work together to accomplish a goal.Organization
structure refers to the system of tasks, workflow, reporting
relationships, and communication channels that link the diverse
parts of an organization. Restructuring is the process of
changing an organization’s structure in an attempt to improve
performance.
Common Organizational Structures

2. *
Organizing and
Management Functions
*
Formal and Informal Structures
The formal structure is the intended or official structure of an
organization. An organization chart is a diagram that identifies
key positions, job titles, lines of authority, and communication
within an organization. An organizational chart may reveal the
following about an organization:the division of worksupervisory
relationshipscommunication channelsmajor subunitslevels of
managementThe informal structure is the unofficial but often
critical working relationships among organizational members,
regardless of formal titles and relationships.
*Functional structure refers to an organizational strategy in
which people with similar skills and performing similar tasks
are grouped together. The major advantages of a functional
structure include:efficient use of resources within and between
functional areasconsistent and appropriate task assignments
based on expertise and training within each functional areahigh-
quality technical problem-solving;in-depth training and skill
development within functionsclear career paths within
functions.Some disadvantages include:creation of functional
chimneysreliance on upper managementconfusion and
responsibility-shifting
Functional Structures

3. *
Divisional StructureDivisional structures group together people
who provide the same services, work within the same processes,
serve similar audiences, or are located in the same area or
geographical region.Potential advantages include:More
flexibility in responding to environmental changesImproved
coordination across functional departmentsClearer points of
responsibility for delivery of services or productsExpertise
focused on specific patients or customers, products, and
regionsGreater ease in changing size by adding or deleting
divisions.Potential disadvantages include:RedundancyInternal
competitionTunnel vision
*Matrix structure combines elements of both the functional and
divisional structures, using permanent cross-functional teams to
integrate functional expertise with divisional focus. Potential
advantages include:more interfunctional cooperation in
operationsincreased flexibility in meeting changing
demandsbetter customer service championed by individual
project managersbetter performance accountability through the
project managersimproved problem-solving at the team
levelimproved strategic managementSome disadvantages:Power
struggles (two bosses)Priority confusionTunnel visionExpense
Matrix Structure
*
Recent DevelopmentsThe global economy and competition have
health care managers searching for organizational structures
that better meet today’s challenges.Traditional vertical

4. structures are being replaced with horizontal structures.
*
The Team ApproachA team is simply a group of workers
organized to accomplish tasks.Teams are the building blocks of
today’s new and more horizontal organizational forms.
*Two other trends in organization are networks and
boundaryless organizations.One type of network is a health care
network where different medical services join together to
provide comprehensive health care, often sharing the services of
one business office and laboratory. Boundaryless organization
are an increasingly common structure in the business world,
which combines teams and network structures for temporary
purposes.
Networks and
Boundaryless Organizations
*Among these trends is a common theme: managers (and indeed
all workers) must make the necessary adjustments to streamline
for cost efficiency and to allow increased worker involvement
in all aspects of operations.Shorter Chains of Command. The
chain of command is the line of authority that vertically links
all positions with successively higher levels of management.
Trend is to streamline organizations by cutting unnecessary
levels of management. Wider Spans of Control. A span of
control is the number of people reporting directly to a manager
within an organizational structure. Trend is toward wider spans
of control that shorten chains of command and increase worker

5. empowerment.
Recent Trends and Changes
*Less Unity of Command. Under the unity-of-command
principle, each person in an organization should report to one
and only one supervisor. Trend is for less, not more, unity of
command in organizations.More Delegation and Empowerment.
Delegation is the process of distributing and entrusting work to
other people. For today’s health care manager, effectively
delegating responsibilities and empowering team members to
make strong, good decisions is critical for success of the work
team and the entire organization.
More Trends and Changes
*Decentralization with Centralization. Centralization refers to
traditional, top-down decision making while decentralization
refers to dispersed decision making. Trend is toward more
decentralization in organizations, while utilizing advances in
information systems to retain centralized control. Reduced Use
of Staff. Trend is for organizations to minimize the use of staff
components in the quest for increased operating efficiency.
Specialized services or skills are often hired on a contract basis.
More Trends and Changes
*
Designing Effective Organizations
Bureaucratic vs. Adaptive Designs

6. *
Making Design Decisions“Structure follows strategy”Stability
oriented vs. growth orientedFive critical checks prior to a
change:Check 1: Does the design fit well with the major
problems and opportunities of the external environment?Check
2: Does the design support the implementation of strategies and
the accomplishment of key operating objectives?Check 3: Does
the design support core technologies and allow them to be used
to best advantage?Check 4: Can the design handle changes in
organizational size and different stages in the organizational
life cycle?Check 5: Does the design support and empower
workers and allow their talents to be used to best advantage?
*
Incorporating SubsystemsSmall departments, work units, or
teams headed by managers are subsystems that perform
specialized tasks within organizations. Concepts important to
successful subsystem use include: differentiation, or the degree
of difference that exists between the internal components of the
organizationintegration, the level of coordination achieved
among an organization’s internal components
*
Evaluating Work Processes
Process reengineering is the systematic and complete analysis
of work processes and the design of new and better ones.
Through process value analysis managers identify and carefully
evaluate each step in a workflow. Each step must be important,
useful, and add value to the overall purpose of the organization;
if not, the step is eliminated.

7. *
TeamsA team is a group of workers organized to accomplish
tasks.Teamwork refers to the process of people working
together to accomplish goals. The usefulness of teams
includes:increasing resources for problem-solvingfostering
creativity and innovationimproving the quality of decision
makingenhancing members’ commitments to tasksraising
motivation through collective actionhelping control and
discipline memberssatisfying individual needs as organizations
grow in size
*
Committees and Task ForcesCommittees usually operate with a
continuing purpose, while its membership may change over
time. Task forces are more temporary, and their official tasks
are very specific and time defined.To help achieve desired
resultsSelect appropriate members Clearly define the purpose
Carefully select a leader Periodically review progress
*
Other Team Trends
Cross-functional teams: members from different functional units
work on a specific problem or task.Employee involvement
teams: meet on a regular basis outside of their formal
assignments, with the goal of applying their expertise and
attention to continuous improvement.Quality circle: an
employee involvement team focused on improving work quality.
Virtual teams: work together and solve problems through
largely computer-mediated rather than face-to-face interactions.
Self-managing work team: workers whose jobs have a high
degree of task interdependence and who have been given

8. authority to make many decisions about how they go about
doing the required work.
*
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Copyright by John Wiley and Sons, 2006
Copyright by John Wiley and Sons, 2006